1. Field of the Invention
The present invention relates to credit cards, debit cards, prepaid cards, financial cards, reward cards, payroll cards, and other cards used in an “open loop” system. An open loop card has the unique characteristics in that it can be used anywhere that an electronic payment network is used (Visa, MasterCard, American Express, Discover, etc). The account value is normally not physically stored on the card; instead, the card number uniquely identifies a record in a central database, where the account balance is maintained; therefore, the card must contain a card number for central database identification. Cards may contain a users name (such as a credit card), or may not contain a name (such as a prepaid or open loop gift card) and therefore be anonymous as to user identification.
For the purpose of this invention, the term “credit card” will be used for all “open loop” system cards.
2. General Background
The following U.S. patents are incorporated herein by reference:
TABLEPat. No.TITLEISSUE DATE3,790,754Security Access MediumFeb. 5, 19744,573,711Secure Credit Card and Method of Mar. 4, 1986Manufacturing Same4,973,515Magnetic CardNov. 27, 19906,592,035Method and Apparatus for Rapid,Jul. 15, 2003Serial Transaction ItemFabrication6,644,551CardNov. 11, 20036,817,530Multiple Image Security FeaturesNov. 16, 2004for Identification Documents andMethods of Making Same7,341,198IC Card and a Method ofMar. 11, 2008Manufacturing Same2004/0004131High Temperature Tag HavingJan. 8, 2004Enclosed Transceiver2006/0080198Cash Transaction SystemApr. 13, 20062007/0125866IC Card and a Method ofJun. 7, 2007Manufacturing Same2009/0019751Removably Attachable Card andJan. 22, 2009Card Retaining Device
In contrast to the open loop concept, a “closed loop” system restricts card usage to a single merchant or merchant group (restaurant, retail store, etc). The card typically contains a card number for point-of-sale activation and card inventory control. A central database is used for point-of-sale activation, processing of subsequent card based transactions, and maintenance of the associated account value. The card user is usually not identified.
In today's gift card market, both open loop and closed loop gift cards are common. The gift card market started primarily as a closed loop system, but open loop cards are evolving as a preferred choice since the gift recipient can use the card at an unlimited number of merchants.
Credit cards were introduced in the mid 1960's, and by 1977 Visa became the first credit card to be recognized worldwide and have the following features:                Physical Attributes                    a. 30 mil multilayer PVC            b. Account #            c. Signature Panel            d. Magnetic Stripe                        2. Account charges recorded using a specialized credit card imprinter                    a. Used embossed credit card to get customer information (Name, Account No., Expiration Date, etc.)            b. Embossed metal merchant plate set in imprinter            c. Adjustable data wheels to give date and transaction amount            d. Multi-part form set to obtain physical copies (customer, merchant, credit card company)            e. Roller carriage mechanically pulled over the form set (imprinting data/transaction amount, merchant information and credit card information                        3. 30 mil card construction                    a. Necessitated by credit card imprinter            b. Mechanical pressure of rollers going over card flatten embossing on thinner cards                        4. 30 mil construction legacy                    a. Brand image, bulk (thickness and raised lettering) creates perceived customer value (vs. non-embossed or thin card)            b. No longer required since card transactions are processed electronically using the magnetic stripe or embedded microchip.            c. Electronic verification of most cards, especially those for debit and prepaid accounts.            d. Print transaction receipt on separate inexpensive printer                        
Disadvantages of 30 mil Credit Cards Versus a Thin Gage (5-15 mil) Credit Card                1. Thickness/Bulk: Thicker wallet and packages.                    a. 30 mil card—no embossing (variable information printed using thermal transfer ribbon or inkjet)                            i. 10 mil (3 times thicker)                ii. 7 mil (4.3 times thicker)                                    b. 30 mil card with embossing: 50 mil thickness                            1. 10 mil: 5 times thicker                2. 7 mil: 7 times thicker. Thicker wallet and packages.                                                2. Weight                    a. Added mailing costs            b. Heavier wallet/purse                        3. Embossing                    a. Increases caliper 65-100%            b. Shortens card life by compromising material integrity during embossing process where stock is mechanically stretched to create the relief of the embossed characters.                        4. Increased cost per card                    a. Multiple ply lamination versus single ply            b. More material by weight            c. Increased number of manufacturing steps            d. Requires a multiple step sheet printing and laminating process versus thin gage cards printed and die cut on a rotary press process (rotary presses typically cannot print material over 15 mils thick as thicker material is too stiff to go around rollers on a rotary press versus a relatively straight path on a sheet fed press).                        
Disadvantages of Thin Gage Cards                1. Customer perception that thinner card is less valuable                    a. Brand Image: Embossing and thicker card is more valuable than a flat thin card.            b. Perception starting to change as thin gage cards become more common and customers realize the user advantages of the thinner card.                        2. Some older swipe readers may not read a thin card unless the magnetic stripe read head is spring mounted to accommodate variations in card thickness.                    a. Most modern swipe terminal readers have spring mounted magnetic read heads that can read 5-30 mil cards                        3. Not all personalization features are available on thinner cards. Embossing and indented CVV2 on back of card is not practical on a thin gage card because these features physically require a thicker card.        4. RFID/Memory Chip Cards require a multiple layer laminated card (to insert the RFID chip and antenna, or the memory chip)        
III. Background: Manufacturing Process—Standard Credit Card (30 mil)                1. PVC overlay with magnetic stripe                    a. Magnetic stripe is hot stamped in one PVC overlay (back side)            b. Separate operation on a tape-layer machine in roll to sheet or sheet to sheet configuration            c. Magnetic liquid slurry is placed on a Mylar carrier (and dried in a manner similar to ink) that creates a magnetic tape that is put into a roll and slit to the width of the magnetic stripe. The roll of magnetic tape is applied with heat (leaving the magnetic slurry stripe) and the Mylar carrier is removed. In the proposed process, magnetics are directly applied to the thin gage, one-layer plastic card; no Mylar carrier is required, thus eliminating one cost and manufacturing element.                        2. PVC Core Printing: The PVC is printed on both the front and backside using a variety of sheet fed presses (frequently including litho press and silk screen process).        3. Collation: The three sheets (front side PVC overlay, PVC core element, and back side PVC overlay with magnetic stripe) are collated together and ultrasonically welded at several points on the sheets to maintain registration.        4. Laminator: The three collated sheets are placed between metal lamination plates (called a “book”), and several books are placed in a laminator. Heat and pressure are applied to do a controlled melt of products bonding the core and top and bottom overlays into a single piece. After the sheets have cooled, they are removed from the laminator plates and stacked for die cutting.        5. Die Cutting the Individual Cards: Laminated sheets (30 mil) are placed in a die cutter or card punch to produce individual cards.        6. Apply hologram and signature panel to individual cards. The hologram is either applied to the front or back of each card by hot stamp, and the signature panel is applied to the back of the card by hot stamp. This application may be done in one combined operation, or two separate operations. The non-personalized card body is complete.        
IV. Card Personalization
Card personalization may include the following elements:                1. Card Number (embossed, or printed by thermal transfer or ink jet)        2. Validity Date/Expiration Date (embossed or printed by thermal transfer or ink jet)        3. Individual's Name (embossed or printed by thermal transfer or ink jet).        4. CVV2 on back side (indent printed or printed by thermal transfer or ink jet). (CVV2 Definition is the trade term for “Card Verification Value 2” which is a secondary security related to the card number. For the traditional 30-mil card, the CVV2 must be imprinted on the back of the card, and must be indent printed. Indent printing is the process of pressing printed characters downward into the surface of the card.) On the thin gage card, the CVV2 can be thermal printed or ink jet printed on the surface of the card, but the printing is not indented.        5. Other printing: PIN number with scratch off label; package reference number, etc.        6. Magnetic encoding        
Personalization elements are identical on both the standard 30-mil card as the thin gage card. However, on the thin gage card, there is no embossing or indented CVV2. The thin gage card is serialized using thermal transfer printing or ink jet printing.